LONDON, September 12, 2014 /PRNewswire/ --
TIGA, the network for games developers and digital publishers has today called for a Creative Content Fund (CCF) to be established in order to encourage new studio formation, stimulate creativity and co-fund new content development and IP generation. The CCF could be part-financed by drawing on funds from the National Lottery.
TIGA's own research shows that games businesses' access to debt and equity finance is comparatively difficult. In a TIGA and ARM survey of 100 games studios published earlier this year, 43 per cent of businesses surveyed listed funding as the single biggest challenge facing their business. Many creative businesses that secure finance typically have to trade away their IP for project capital. Yet retaining ownership of successful IP enables game developers to generate new cash flows and will support more sustainable businesses.
The establishment of a Creative Content Fund could help overcome these challenges and exploit new commercial opportunities. The CCF could disburse 20 loans of up to £150,000 per annum (£3 million in total) to game developers. For context, the BFI invests over £26m of Lottery funds each year to support film development, production and distribution activity in the UK and the budget is set to rise to £30m by 2017.
Funding could be made available in two forms. Firstly, loans could be made on a pound for pound matched funding basis. Alternatively the CCF could distribute funding in the form of a convertible loan on commercial terms. The CCF would aim to recoup the money from recipients out of successful sales once they had generated a certain amount of revenue and over an agreed time period.
Eligible companies and projects would need to meet criteria including the following:
- The company is based in the UK.
- The company proposes to develop original new games IP which is innovative in terms of content, gameplay and, where appropriate, business models.
- The company retains majority ownership of the IP during the term of the loan.
- The company should have to demonstrate a robust business plan about how it intends to use the match funding to enhance its prospects for commercial success.
- The CCF should invest in projects that have the potential for commercial success. Independent assessments of each game's production and commercial potential should be sought as part of the CCF's due diligence, before a funding decision is made.
- A commercial mentoring business advisory service should be provided for companies benefiting from CCF disbursements in order to provide guidance to new companies.
The CCF has precedents. Finland's Tekes government-backed funding agency has provided nearly $70m in funding to Finnish games developers since the late 1990s providing financial assistance to many of the country's studios at the crucial high risk early stages of their existence. This includes providing early stage finance to Supercell and Rovio, two companies that have gone on to become global gaming giants.
Dr Richard Wilson, CEO, TIGA, said:
"TIGA is focused on strengthening the UK videogame industry. If we are to build more successful games businesses then we need to enhance developers' access to finance and remove the restraints on their creativity. Establishing a Creative Content Fund would improve developers' ability to raise finance, stimulate original IP generation and promote studio growth. It would enhance the independence and commercial viability of game developers and strengthen the prospects for the expansion of the UK video games industry."
Notes to editors:
TIGA is the trade association representing the UK video game industry.
We help developers and digital publishers build successful studios, network with the right people, save money and access professional business advice. We also have traditional publishers, outsourcing companies, technology businesses and universities amongst our membership.
TIGA is 90% funded by independent UK businesses. 80% of our board members are developers and/or from UK owned businesses, and 50% of our board are UK business owners themselves. Since 2010, TIGA has won 17 business awards.
TIGA focuses on three sets of activities:
- Political representation
- Media representation
- Business services
This enhances the competitiveness of our members by providing benefits that make a material difference to their businesses, including a reduction in costs and improved commercial opportunities.
It also means our members' voices are heard in the corridors of power and positively represented in national, broadcast and UK video game trade media.
Get in touch:
For further information, you can also contact:
Dr Richard Wilson, TIGA CEO on: +44(0)7875-939-643 or email: firstname.lastname@example.org
Drew Field, TIGA Communications Director on: +44(0)7720-643-344 or email email@example.com
SOURCE TIGA, the trade association representing the UK video game industry